Despite the deafening racket of the mass-media drums of war, neither President Obama nor the Pentagon has an appetite for a confrontation with Iran that could unleash havoc across the Middle East and would at best simply delay Tehran’s acquisition of nuclear weapons. Yet although U.S. intelligence believes Iran has not yet taken a decision to build weapons, the nation has shown no inclination to halt its nuclear development despite facing an unprecedented array of sanctions. In an election year in which Obama’s opponents paint him as weak in the face of an Iranian menace they routinely exaggerate, and in the face of a continued Israeli threat to unilaterally initiate hostilities, the President finds his options narrowing. Monday’s formal adoption by the European Union of an embargo on Iranian oil tightens the screws of what Tehran views as a campaign of economic warfare by Western powers. At the same time, however, the Administration appears once again to be turning its attention to the vexing question of finding a diplomatic solution to the standoff.

Negotiations are clearly on the minds of both sides. “Consensus can only be reached through serious negotiations based on a cooperative approach and not via the wrong path of sanctions,” said Iranian Foreign Ministry spokesman Ramin Mehmanparast on Saturday, Jan. 21. And Obama, in an interview with TIME’s Fareed Zakaria last week, stressed that sanctions are designed to urge Iran to take “a diplomatic path where they forgo nuclear weapons, abide by international rules and can have peaceful nuclear power as other countries do, subject to the restrictions of the Non-Proliferation Treaty.”

Diplomacy it shall be, then, and although no dates or specifics have been confirmed, it’s widely assumed that the coming weeks will see a new round of talks between Iran and Western powers in the “P5+1” format comprising Germany and the permanent members of the U.N. Security Council: Russia, China, France, Britain and the U.S. The talks, which will most likely be held in Turkey, will aim to find confidence-building measures on which Iran and Western powers can agree.

Iranian officials claimed last week that the Obama Administration has discreetly called for direct talks, although U.S. officials denied the specific claim that such an approach had come in the form of a letter primarily concerned with Iranian threats to shipping in the Gulf. But they also made clear that the U.S. seeks to engage Tehran in search of a diplomatic solution.

The fact that both sides seek a diplomatic solution — and that the standoff concerns what Iran might do in the future with the nuclear infrastructure it is assembling rather than what it is currently doing with that infrastructure — might seem to bode well for the prospects of diplomacy, but nobody’s especially optimistic. Western powers believe Iran intends to at least acquire the capacity to build nuclear weapons in a relatively short time should it deem them necessary; they point to a recent International Atomic Energy Agency (IAEA) finding that some of Iran’s previous research work (mostly before 2003) may have focused on building nuclear warheads. As a result, the U.S. and its allies don’t trust that Iran will confine its nuclear activities to nonmilitary purposes.

A diplomatic solution, Obama told TIME, requires not only that the Iranians disavow nuclear weapons — which, of course, they have done — but also that Iran say, “We won’t stockpile material that can be used for weapons.” By this, Obama said he meant stockpiling uranium that could be transformed into weapons-grade. That’s where things get tricky: having “peaceful nuclear power as other countries do, subject to the restrictions of the Non-Proliferation Treaty” doesn’t preclude stockpiling uranium enriched to levels used in civilian nuclear reactors (as Iran is currently doing), even though such material could potentially be reprocessed into weapons-grade material. That’s a right all signatories to the NPT enjoy, putting their nuclear activities under the scrutiny of the IAEA. While Iran has been ordered to suspend enrichment until it satisfies concerns raised by the IAEA over its previous nuclear work, much of which was conducted in secret, its current enrichment activities occur under IAEA monitoring. It is under orders to suspend that work, but its right to enrich uranium once it has satisfied transparency requirements is not in question by the U.N.

Before Iran mastered the technology of enrichment, the Bush Administration, France and Israel insisted that it could not be allowed to enrich uranium on its own soil and should instead buy reactor fuel from abroad. But uranium enrichment became a “fact on the ground” in Iran in 2006 and has steadily expanded ever since despite sanctions and Security Council resolutions. Israel and France continue to insist on zero enrichment in Iran as part of any diplomatic solution, but many believe compromise is unlikely on those terms. When the Obama Administration took office, some key foreign policy players, such as former Secretary of State Colin Powell and Senate Foreign Relations committee chairman John Kerry, warned that the zero-enrichment demand was untenable and that the focus instead should be on strengthening guarantees against weaponization.

But the Israelis in particular and their supporters on Capitol Hill have pressed Obama to hold the line. Late in 2010, Secretary of State Hillary Clinton told a BBC interviewer that a diplomatic solution would include Iran’s exercising its right to enrich uranium for peaceful purposes once it “restored the confidence of the international community” that its program had no military objective. In response, an influential group of U.S. Senators wrote to Obama demanding that the U.S. “make clear that, given the government of Iran’s patterns of deception and noncooperation, its government cannot be permitted to maintain any enrichment or reprocessing activities on its territory for the foreseeable future,” warning that they would strongly oppose any diplomatic outcome in which Iran was permitted to continue enriching uranium.

As Iran analyst Trita Parsi has noted, “The Obama administration has left this issue vague, neither rejecting nor accepting this red line. Israel fears that in a final agreement, the Obama White House would accept enrichment in Iran, a fear fueled by the administration’s attempt to exchange Iranian low enriched uranium for fuel pads for a research reactor in Tehran earlier in 2009. Both France and Israel argued that the deal would legitimize Iranian enrichment. In Israel’s view, Obama has made America’s red lines flexible and unreliable.”

And Israel may hold something of a veto, given that much of the Administration’s Iran policy is constructed on the assumptions that Israel’s actions are beyond its control and that the Israelis — who play the proverbial bad cop in the Iran standoff — could start a war that would likely draw in the U.S. if they believe the methods of the Western good cop are not producing the desired results. Restraining Israel from launching air strikes by toughening the sanctions regime has been the pattern of U.S. Iran policy over the past two years. The problem is that what is being demanded of Iran is seen from Tehran as capitulation, and that remains unlikely even if it were inclined to make compromises.

Israel’s harder line enjoys additional leverage in Washington by virtue of the support Israel enjoys on Capitol Hill, even among some top Democratic donors on whose support Obama is counting in his re-election effort. That dynamic was much in evidence last December when the Administration failed to walk back some of the farther-reaching aspects of the latest sanctions package. Obama still has the authority to grant waivers on measures punishing countries that continue to do business with Iran, but as things stand, he’ll have to invoke that authority in the heat of a closely contested election season.

It’s far from clear, also, that Iran has any intention to significantly compromise. Internal politicking prompted Tehran to walk away from the last confidence-building deal involving a swap of enriched uranium for fuel plates in October 2009. Even if Iran is under far more sanctions pressure now, as a result of the Obama Administration’s efforts, it would take a leap of giddy optimism to imagine an imminent breakthrough.

Yahoo! diplomatic correspondent Laura Rozen reported last week that insiders were suggesting that Western powers will measure Iran’s “seriousness” in the coming talks by its willingness to halt enrichment of uranium to 20% and turn over its existing stockpile of uranium that has been enriched to that level. (That material is substantially closer to bomb-grade, but Iran has been enriching to that grade ostensibly to provide fuel plates for the Tehran Research Reactor, whose need to create medical isotopes was the basis of the previous fuel-swap offer.) In exchange, reported Rozen, Western powers would agree to refrain from passing another Security Council sanctions resolution.

It doesn’t take a clairvoyant to see that Iran is highly unlikely to accept a deal under which it gives Western powers something they want but that leaves the latest, most damaging sanctions on Iran’s oil exports still in place, instead simply holding off on another round of U.N. sanctions — which are far less painful and which the Western powers are unable to persuade Russia and China to substantially tighten. While Iran may have begun enriching to 20% both to master the technological challenges of enriching to higher degrees (which any bomb program would require) and to create a bargaining chip that could be played in future talks, it’s unlikely to trade it for something so insubstantial. Iran’s leaders insist on the legitimacy of their enrichment of uranium, and it was the proposal to send a substantial proportion of a stockpile that Iran had suffered so much (by way of sanctions and covert warfare) in order to create that was used by opponents across the political spectrum to shoot down the deal championed by President Mahmoud Ahmadinejad in late 2009.

The negotiating strategy on each side mimics the other, if anything, adding new pressures ahead of any talks to get a stronger hand. The Iranians are leaving little doubt that they would expect an easing of sanctions in exchange for concessions on 20% enrichment, but easing sanctions may be difficult for Obama in an election year, particularly if Israel is sharply opposed — and it has been skeptical of such deals throughout the process. Given Israel’s goal of preventing Iran from holding on to any enrichment capability, it’s not hard to see why it would take a dim view of confidence-building mechanisms that could be seen as tacit acceptance of lower-grade uranium enrichment in Iran. And Israel’s operating assumption is that Iran negotiates simply to “play for time” and weaken the resolve of its adversaries.

It’s precisely because prospects for achieving a breakthrough in the P5+1 format remain slim that the Obama Administration may be seeking more direct channels of communication with the Iranian leadership to avoid a slide into confrontation. Such channels would necessarily be discreet — in public, the Iranians continue to play hardball, late last year declining an offer of establishing military-to-military links to prevent confrontation through misunderstandings among forces deployed in the Gulf — and would allow the two sides to engage on some of the strategic conflicts that undergird the nuclear issue. But in an election year, and given the domestic politics on both sides, notes professor Gary Sick of Columbia University, the public posture among leaders will remain hostile in order to forestall any backlash. Absent a discreet, direct channel between the Obama Administration and Iran’s key decisionmakers, the chances of stumbling into confrontation remain high.

Tony Karon is a senior editor at TIME, where he has covered international conflicts in the Middle East, Asia, and the Balkans since 1997. A native of South Africa, he now resides with his family in Brooklyn, New York.